Investor's Quiz: Were Stock's Attributes Good Enough?

This company went public in 2004 and quickly fell into a long and uneven base. After hitting a record high in November 2005, it fell into a similar long pattern.

Earnings growth had decelerated and even declined in the March 2006 quarter.

But shortly thereafter, the company found its footing. Earnings grew 20%, 23%, 34% and 46% in the next four quarters. Sales increased at a rate of 24% to 34% during those same periods.

The company's return on equity was 23% in 2006, up from 16% the year before.

The stock formed a shallow cup-with-handle base from February to April 2007 (point 1). Even though it was part of a longer consolidation, it was still a base.

The stock then surged higher, until it pulled back to its 10-week moving average line in June (point 2).

Did that point 16rovide investors with a valid entry point?